How relational contract theory influence management strategies and project outcomes: a systematic literature review

Figures & data

Figure 1. Analytical and theoretical frameworks.

Figure 2. Summary of systematic review process.

Figure 3. Evolutional development of Relational contracting (RC).

Table 1. Macneil’s common contractual norms and extremes.

Norms	Definitions	Transactional extreme	Relational extreme
Contractual Solidarity	Contractual solidarity relates to the mentality of the stakeholders, belief in assisting each other even during adversity.	Low level of trust and a competitive and conflict-ridden atmosphere.	High level of trust and a cooperative and collaborative atmosphere.
Cohesive norm or linking norms	Norms that try to maintain the exchange and unity between stakeholders. Such as restitution, reliance and expectation	Broken promises; inability to depend on other parties; no reassessment of gains.	Promises kept and completed; Interdependency; reassessment of gains.
Power or creation and restraint of power	Power is divided between the parties. Relates to the control of power and limitation (and if possible, elimination) of exploitation	Organisations seeking control to leverage power; opportunistic behaviour.	Organisations not controlling and refraining from using their powers; Sharing of mutual benefits.
Propriety of means	Propriety of means is organisations having the ability to perform their commitments.	Use of advantageous or imposed means to maximise individual interests.	Use of adequate means or freedom of choice to achieve the project objectives;
Reciprocity	Reciprocity ensures fairness in the exchange. Mutual benefit occurs through collaboration and sharing of both gains and liabilities in a project.	Allocation of benefits and burdens to maximise individual interests.	Sharing of risks and rewards; maximisation of collective interests.
Role integrity	Role integrity is where organisations are expected to behave correctly to fulfil obligations and project objectives	Individual concerns are taking precedence over collective concerns; simple and defined roles.	Collective concerns overriding individual concerns; complex and multidimensional roles;
Flexibility	Flexibility is the facility to change during the relationship and adapt to external and internal situations.	Rigid agreement which is difficult to adjust or adapt to changes.	Supple agreement with the ability to modify or adapt to changes.
Harmonisation	Harmonisation requires the shared values of society, such as freedom, human rights, environmental matters, and mutual accommodation harmonised in the social matrix.	Strict and rigorous application of the contract; dispute resolution in courts.	Contract is not employed or referred to in the relationship; internal dispute resolution; waiver of claims; no dispute.
Implementation of planning	Implementation of planning involves planning the future performance and risks associated with executing the relationship.	One-sided control of terms; propensity for preliminary planning instead of future planning	Use external standards to plan performance; adjustments along the way; agree as you go along.
Effectuation of consent	Effectuation of consent is the causal mechanism for agreement in the exchange or the perception of having choices (often not free of pressure).	One absolute choice; restriction of future opportunities; formal rationality.	Agree as you go along; indeterminate choices; substantive rationality.

Adapted from Jobidon et al. (2019).

Table 2. Classification of objective definitions of relational contracting.

Definition	Theme classification
“A relational contract is an agreement whereby all contractual parties collaboratively work together under the same conditions” (Abd El-Moneim et al. 2017, p. 35).	Contracting Collaboration
“ A contract is fundamentally about cooperative social behaviour and that contracts containing significant relational elements are the predominant form of contracting ” (Cheung et al. 2006, p. 50).	Social Norms
“A transaction or contracting mechanism that seeks to give explicit recognition to the commercial “relationship” between the partners. In essence, responsibilities and benefits of the contract are apportioned fairly and transparently, with mechanisms for delivery that focus on trust and partnership” (Colledge 2005, p. 30).	Contracting mechanisms
“Organisational systems and procedures expected to provide scope for relationship development” (Edkins and Smyth 2006, p. 85).	Relational Governance
“ Contracts that specify binding criteria for the behaviour of the stakeholders in the contract ” (Gransberg and Scheepbouwer 2015, p. 74).	Relational Governance
“Aligns project objectives with the interests of key participants…flexible determination of risks…where parties embrace unforeseen and unpredictable events as being inherent to the maintenance of a long-term contractual relationship” (Jobidon et al. 2018, pp 2–24).	Risk, Project alignment
“ A process to establish the working relationships between the parties through a mutually developed, formal strategy of commitment and communication aimed at win-win situations for all parties” (Kumaraswamy et al. 2005b, p. 1066, Yeung et al. 2012a, pp. 226–230, Memon et al. 2015, p. 2, Mesa et al. 2019, p. 400).	Relational Governance
“Parties who do not always follow the legal mechanisms in the written contracts. The parties themselves govern the transactions within mutually acceptable social guidelines”, (Kumaraswamy et al. 2005b, p. 1066, Yeung et al. 2012a, p. 226, Ling et al. 2014b, p. 276, Memon et al. 2015, p. 2) “and from this relationship emerge the obligations among the parties” (Kumaraswamy et al. 2005b, p. 1066, Memon et al. 2015, p. 2).	Relational Governance
“Based on recognition of mutual benefits and win-win scenarios through more cooperative ..relationships between the contracting parties” (Palaneeswaran et al. 2003, p. 572, Rahman and Kumaraswamy 2004, p. 148, Ling et al. 2006, p. 57, Rahman and Kumaraswamy 2008, p. 48, Yeung et al. 2012a, p. 226, Ling et al. 2014a, p. 1, Ke et al. 2015a, p. 176, Ke et al. 2015b, p. 2, Ling et al. 2015, p. 172, Mesa et al. 2019, p. 401).	Contracting Collaboration
“Considers contracts to be relationships among the parties, in the process of projecting exchange into the future” (Ling et al. 2006, p. 57, Rahman et al. 2007, p. 76, Rahman and Kumaraswamy 2008, p. 48, Ling et al. 2014b, p. 275, Ke et al. 2015a). “Between the principal contracting parties sustained by the significance of projecting exchange into the future” (Silva and Harper 2018, p. 683).	Relational Governance
“All contracts except the fully transactional carry a relational element” (Jelodar et al. 2016a, p. 1005, Jelodar et al. 2016b, p. 1) “Apart from the fully transactional contract, all other contracts are relational” (Yeung et al. 2012a, p. 226)	Contract: Relational Elements
“Contracts should cater for the proposed transaction, especially in the face of uncertainty and complexity, why people cooperate and why some specific measures are to be crafted in contract” (Yeung et al. 2012a, p. 226).	Contracting: Risk
“Derives from the way in which strong commercial relationships are developed and sustained for the mutual benefit of all parties” (Ballard and Howell 2005, p. 33)	Contracting mechanisms Relational Governance
“This longer duration, each party …then forms a relationship” (Harper et al. 2016, p. 2).	Interorganisational relationships
“Formal contract is complemented by relational contracts.., in which contracting parties adopt relational contracting (RC) behaviour and practices” (Ling et al. 2015, p. 170).	Relational Governance
“ Seek to bind parties to one another through social and cognitive psychological mechanisms as they jointly pursue project objectives ” (Hall and Scott 2019, p. 134).	Contracting mechanisms
“As a way to maximise project outcomes in a complicated environment by adopting a conscious approach to build up and manage relationships alongside the cooperative application of ever-improving project processes” (Mesa et al. 2019, p. 400).	Relational Governance
“A process to establish and manage the relationships among parties that aims to remove barriers, encourage maximum contributions, and allow all parties to achieve success” (Memon et al. 2015, p. 2).	Relational Governance
“Informal arrangements such as verbal agreements, letters of intent or even a “gentlemen’s agreement” (Ling et al. 2015, p. 172).	Relational Governance Social norms
“To generate an organisational environment of trust, open communication and employee involvement” (Yeung et al. 2012a, p. 226, Mesa et al. 2019, p. 401).	Social norms Relational Governance
“A relational contract .. can be understood from two aspects. One is “relational”, emphasising flexible factors .. The other is “contract”…. the power of punishment”(Wang et al. 2019, p. 342).	Relational Governance
“Contracts where there is a legal connection between or among businesses” (Yates and Epstein 2006b, p. 168)	Contractual governance
“Mini society with a vast array of norms beyond those centred on the exchange” (Ballard and Howell 2005, p. 60, Hall and Scott 2019, p. 134, Jobidon et al. 2019, p. 6).	Embedded social norms

Table 3. Classification of literature by predominant strategy type.

Categorisation	Strategy type	Number	Source
Full	Partnering	4	(El-adaway et al. 2017, Gransberg and Scheepbouwer 2015, Hosseini et al. 2017, Yates and Duran 2006a)
Full	Project Alliance (PA)	2	(Fernandes et al. 2018, Gransberg and Scheepbouwer 2015)
Hybrid	Early Contractor Involvement (ECI)	3	(Chen and Manley 2014, Lahdenpera 2016a, Lahdenpera 2016b)
Full	Integrated Project Delivery (IPD)	5	(El-adaway et al. 2017, Hall et al. 2018, Hall and Scott 2019, Jobidon et al. 2018, Mesa et al. 2019)
Fragmented	Private-Public Partnership (PPP)	3	(Edkins and Smyth 2006, Jagannathan 2017, Lenferink et al. 2013)
Full	Lean Project Delivery (LPD)	1	(Mesa et al. 2019)
Full, Hybrid, Fragmented	All strategy types*	1	(Yeung et al. 2012a)
	Others**		29

Notes: * Some studies explore more than one strategy, ** Studies of a conceptual or mixed nature.

Figure 4. Deduced fully relational contracting model with integrated teams in both design and construction.

Figure 5. Deduced Hybrid relational contracting model with an integrated team in design.

Figure 6. Deduced Fragmented relational contracting model with an integrated team outside design and construction.

Table 4. Definition of identified Project Management themes.

Themes	Definition
Project	Project referring to all benefits related to physical plans found in project management such as cost time and quality
Teams	Teams refer to the benefits found in teams
Governance strategy	Governance strategy refers to roles, responsibilities and decision making in a project
Early planning	Early planning concerns the early planning phase
Work environment	Work environment relates to the benefits found in the operational environment
Risk management	Risk management relates to the identifying, analysing and taking precautionary steps to reduce/curb risks
Issue management	Issue management looks at the identification and resolving of issues
Continuous improvement	Continuous improvement is about how value is achieved
Intercommunication	Intercommunication involves improvements to communication
Innovation	Innovation is related to innovativeness benefit in projects
Scope management	Scope management relates to the benefits of managing the scope

Table 5. Benefits and disbenefits of relational contracting.

Identified themes	Benefits in each group	Dis-benefits in each group
Project	Achievement of economic, financial objectives (Cost, quality, time)	Unachievement of financial objectives (Cost, time)
	Achievement of common objectives/Commitment to project goals/Alignment of team objectives/ Sharing mutual objectives/Joint commitment	Decreased profit margins (IPD shared risk and reward), “the client ultimately bears and pays for the risk when a megaproject runs into trouble”
	Improved project efficiency/Maximise efficiency in all phases. Contributes to the success of a project/Optimise success	Lack of time and resources (Joint decision-making and “More solutions studied than traditionally” entailed.)
	Cost-effectiveness/ Improved profit margins. Cost reduction	Cost increase (Late planning, new contracts, new methods)
	Improved project outcomes/Better project performance	Late completion (learning environment, new contracts, new methods)
	Improvement of project quality
	Timeliness of completion
Teams	Sharing of tacit knowledge for current and future projects/Competitive/commercial advantage/Learning environment/ Recognises interests and develops an environment of care/ Best for project/ Value-based decision making	Overload (learning environment, new contracts, new methods). The processes and conditions giving rise to new rules, understandings, and associated practices” for the early stages of a new project delivery model. “excessive amounts of meetings that lead to meeting exhaustion”
	Integrates people systems business structures and practices/ Promote integrated teams	Regression (Old habits), Competitive-Additional shortcomings included that self-interest exceeded interest in the project due to human nature
	Effective team working	Power changes (Main contractor – designers). The developer does not have the final word
	Improved Individual benefits (Developed creative and competent employees)/ Harnesses/integrate talents and insights to optimise results/ Creation of project stakeholders willing to resolve construction challenges/ Employee involvement/ Maximising participants resources	We already do it syndrome” Experienced team members (different contractual contexts) assume nonexistent knowledge and experience and might lead teams the wrong way and negatively affect project outcomes. The Uncommitted Member who received internal pressure from their company to revert to old habits.
	Greater interdependence/ Solve the problem of interdependence	Subcontractors lack experience with open-book leading to lower cooperation.
	Increased satisfaction	Time spent studying solutions not always led to optimal solutions.
		Contractors in particular as being focussed on profit-making and self-interested gains, as well as on the narrow temporal dimension (quarterly cycles) in their cognitive processes.
Governance strategy	Bilateral governance/ Solve governance problems/ Integrated project governance/ Parties govern the transaction	Dysfunctionalities in governance: PA- Subcontractors excluded from project decisions. “Cognitive locked in” and “relational inertia” Honouring obligations (Participants’ expectations were too high due to publicity given to IPD)
	A proactive and formalised approach	Difficult to pinpoint who is responsible (Horizontal communication-Joint decision-making)
		Strong ambiguity, when employees are not familiar in an alliance organisation “what to do” first and “who was in charge” kept arising.
Early planning	Early involvement of key participants/ Early contributions of knowledge and expertise
	Improved, encourages early planning/ Mutual future planning/ Intensified early planning
Work environment	Development of an atmosphere conducive to innovation, trust and commitment	Disalignment of interests (subcontractors on traditional contracts),
	Mutual trust/ Trust environment/ Establish trust	Hurry-up schedule, although more productive, deprives team-building activities that support the collaborative spirit
	No-blame culture /Building a RC culture	Added greed, mistrust, cultural barriers, and lack of insurance coverage to the list of barriers of IPD adoption
Risk management	Risk reduction/ Sharing of benefits and burdens/ Mutual benefits, risk-sharing/ Proactively addresses risks/ Overcome risk and uncertainty/ Managing all risk jointly/ Risk sharing mechanisms	Overcompensate (Lack of more rigorous system integration testing). Concerns for all respondents about current IPD practices were insurance and risk allocation
Issue management	Effective problem resolution/ Make easier resolution claims and disputes are avoided	Disparity in contract management (Pre-Award vs awarding: (letter of intent then IPD). Trivial subcontractor issues wasted the time of the whole team;
	Reduced litigation /Liability exposure	The internal roles of the project employees and potential conflict among the professional logics of different groups (failure to build, paradoxically, a temporary but sustainable hybrid organisation)
Continuous improvement	Generation of better value for client/ Generation of greater customer satisfaction/ Increased value
	Generation of better value for a project team
	Continuous improvement/ Embrace lean principles
	Encourages new ways to manage and execute design and construction
Communication	Encourages collaboration/ Improved relationships/ Building relationships/ Team building/ Improves working relationship between various stakeholders/ Establish working relationships/ Enhance team collaboration/ Facilitates the partnering mechanism/ Unites a collaborative team	Having too many individuals involved in decision making slowed the process and made it more complex,
	Open and honest communication/ Promotes communication	Joint decision-making (Too small decisions had to be unanimously taken
	Development of relational tools (team goals, meetings and reviews)
	Encourage appropriate information technology like Building Information Modelling (BIM) for real-time sharing of information
	Better cooperation among stakeholders, project participants/ Promote cooperation
	Elimination of adversarial relationships/ Lubricate, remove any transactional frictions, barriers/ Reduce conflict of interest/ Less opportunistic contracting/Reduced transaction costs. Share resources.
Innovation	Increased opportunity for innovation/ Encourages collaborative innovation/ Innovative
Environment & safety	Sustainability/ Environmental performance. Reduce waste. Safety performance
Scope management	Efficient change management/ Flexibility to respond jointly/flexible contracts/ Changes to the project	Discomfort among the design-build subcontractors due to uncertainty associated with the iterative designs needed for IPD

Table 6. Use of Macneil’s norms as benefits in RC literature.

Macneil ten norms	Identified themed benefits	Identified themed disbenefits
(1) Role integrity	Not mentioned as a benefit	Teams, Issue management
(2) Reciprocity	Risk management	Teams
(3) Implementation of planning	Governance strategy	Governance strategy
(4) Effectuation of consent	Not mentioned as a benefit	Governance
(5) Flexibility	Scope management	Not mentioned as a disbenefit
(6) Contractual solidarity	Project	Teams
(7) Linking norms	Work Environment	Work Environment
(8) Creation and restraint of power	Intercommunication	Teams
(9) Propriety of means	Not mentioned as a benefit	Project
(10) Harmonisation with the social matrix	Intercommunication	Issue management

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